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PREX2 (phosphatidylinositol-3,4,5-triphosphate-dependent Rac-exchange factor 2) is a PTEN (phosphatase and tensin homolog deleted on chromosome 10) binding protein that is significantly mutated in cutaneous melanoma and pancreatic ductal adenocarcinoma. Here, genetic and biochemical analyses were conducted to elucidate the nature and mechanistic basis of PREX2 mutation in melanoma development. By generating an inducible transgenic mouse model we showed an oncogenic role for a truncating PREX2 mutation (PREX2(E824)*) in vivo in the context of mutant NRAS. Using integrative cross-species gene expression analysis, we identified deregulated cell cycle and cytoskeleton organization as significantly perturbed biological pathways in PREX2 mutant tumors. Mechanistically, truncation of PREX2 activated its Rac1 guanine nucleotide exchange factor activity, abolished binding to PTEN and activated the PI3K (phosphatidyl inositol 3 kinase)/Akt signaling pathway. We further showed that PREX2 truncating mutations or PTEN deletion induces down-regulation of the tumor suppressor and cell cycle regulator CDKN1C (also known as p57(KIP2)). This down-regulation occurs, at least partially, through DNA hypomethylation of a differentially methylated region in chromosome 11 that is a known regulatory region for expression of the CDKN1C gene. Together, these findings identify PREX2 as a mediator of NRAS-mutant melanoma development that acts through the PI3K/PTEN/Akt pathway to regulate gene expression of a cell cycle regulator.